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Legislators work on way for Newfound to keep surplus

By DAN SEUFERTUnion Leader Correspondent

BRISTOL - Legislators from both sides of the aisle joined Wednesday in formulating a bill that would change a technicality in a state law that would allow the Newfound Area School District to keep its $700,000 budget surplus.

The bill, which has no bill number yet, is a "rare fast-track temporary fix" that came out of meetings of Democrat and Republican legislators, Gov. John Lynch, and representatives from the Department of Revenue Administration, the New Hampshire School Board Association, the Department of Justice and the Local Government Center.

A special public hearing will be held next Wednesday at a yet-to-be-determined location in Concord, said state Sen. Jeanne Forrester, R-Meredith. The goal is to have the bill on Lynch's desk by Jan. 2 so it can be passed well before the first Newfound budget hearing for the 2013-14 year.

"It was amazing to see the bipartisanship," Forrester said.

"Let's hope this carries forward into the new (legislative session).

Two weeks ago, district officials discovered they no longer had a $700,000 budget surplus from last year, as Department of Revenue officials had followed regulations for public school systems that impose a tax cap under SB2, the state's spending cap law that was passed in 2011.

SB2 has worked well for municipalities, according to one of its sponsors, Sen. David Boutin, R-Hooksett. But when Newfound district voters approved a 2 percent school district cap last March, the decision triggered a part of SB2 that produced "an unintended consequence."

While the district approved and agreed to raise $11.6 million at last year's town meeting, a $700,000 discount was applied, and only $10.9 million was set be raised in the school portion of the tax cap for this school year.

"That would have left the school district with $700,000 to pay out of their coming budget," said Rep. Suzanne Smith, D-Grafton District 7, who was among those crafting the "fix" legislation.

School officials reached out to Concord, and found that state officials and lawmakers understood there was a problem with the wording in the SB2 legislation that needed to be fixed, quickly.

Boutin was among the first to join the discussion, and helped craft the language for the temporary fix. If passed, the bill will only deal with Newfound's problem, allowing the district to absorb its surplus as planned.

A permanent fix to the law will be sought in the months ahead, Boutin said.

"When you have major legislation, small glitches and major burps will inevitably arise," he said. "Newfound is the only school district in the state to pass a spending cap (after SB2 was passed), and the wording needs to be changed. This is all about the kids of Newfound and their needs."

A spokesperson for Lynch said the governor will consider the bill when it arrives.